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Discussion ● Local Revenue - County / District Historical Assessment - Millage History / Act 1 - Real Estate Tax Increase / Effects - Calculations

• State Revenue - Basic Education Funding History / Moving Forward

- Governor’s Budget Presentation • Challenges • Politically

- State Budget - Funding

• Budget Summary

• Timeline – Revised

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Review of First Look 2016-17 Budget

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Local Revenue

Historical Tax Assessment Information

Percent

Tax Year Total Assessments Annual Change Change

2002 30,486,345,519

2003 31,701,386,466 1,215,040,947 3.99%

2004 32,706,047,748 1,004,661,282 3.17%

2005 33,695,691,190 989,643,442 3.03%

2006 34,608,147,816 912,456,626 2.71%

2007 35,431,814,248 823,666,432 2.38%

2008 36,107,970,018 676,155,770 1.91%

2009 36,526,648,175 418,678,157 1.16%

2010 36,519,701,853 -6,946,322 -0.02%

2011 36,469,186,768 -50,515,085 -0.14%

2012 36,407,357,056 -61,829,712 -0.17%

2013 36,421,160,028 13,802,972 0.04%

2014 36,611,357,228 190,197,200 0.52%

2015 36,949,355,330 337,998,102 0.92%

2016 37,272,084,899 322,729,569 0.87%

-$75,000,000

$125,000,000

$325,000,000

$525,000,000

$725,000,000

$925,000,000

$1,125,000,000

$1,325,000,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Annual Change in Chester County Tax Base

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Local Revenue

Avon Grove

Historical Tax Assessment Information

Percent

Tax Year Total Assessments Annual Change Change

2002 1,305,618,758

2003 1,383,350,410 77,731,652 6.0%

2004 1,466,262,848 82,912,438 6.0%

2005 1,552,955,618 86,692,770 5.9%

2006 1,661,586,498 108,630,880 7.0%

2007 1,732,036,108 70,449,610 4.2%

2008 1,790,628,848 58,592,740 3.4%

2009 1,815,605,923 24,977,075 1.4%

2010 1,813,253,165 -2,352,758 -0.1%

2011 1,817,987,512 4,734,347 0.3%

2012 1,825,365,257 7,377,745 0.4%

2013 1,839,399,117 14,033,860 0.8%

2014 1,869,280,567 29,881,450 1.6%

2015 1,891,145,697 21,865,130 1.2%

2016 1,902,271,305 11,125,608 0.6%

-$35,000,000

-$15,000,000

$5,000,000

$25,000,000

$45,000,000

$65,000,000

$85,000,000

$105,000,000

$125,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Annual Change in Avon Grove Tax Base

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Local Revenue

(4,800,000)

(4,400,000)

(4,000,000)

(3,600,000)

(3,200,000)

(2,800,000)

(2,400,000)

(2,000,000)

(1,600,000)

(1,200,000)

(800,000)

(400,000)

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Reduction in Real Estate Tax Revenue Due to Property Assessment Appeals between 2012 - 2016

2015-2016 Reduction in Tax Revenue2014-2015 Reduction in Tax Revenue2013-2014 Reduction in Tax Revenue2012-2013 Reduction in Tax Revenue

Real Estate Millage for Chester County School Districts

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School District 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 (EIT)

Avon Grove SD* 23.8200 23.8200 23.8200 23.8200 24.7200 26.180 26.7500 26.7500 27.4990 28.1570 No

Coatesville Area SD 25.7000 25.7000 26.5000 27.5000 28.4900 29.490 30.1090 31.1926 32.0036 32.7716 Yes

Downingtown Area SD 23.1500 24.0500 24.8500 25.4750 26.2130 26.728 27.1820 27.1820 27.1820 27.1820 Yes

Great Valley SD 16.9700 17.4400 17.9200 18.2200 18.5000 19.030 19.5900 19.5900 20.0000 20.3200 No

Kennett Consolidated SD 21.5700 21.9500 23.1400 23.9537 24.7781 25.729 26.7303 27.4520 27.9406 28.6020 Yes

Octorara Area SD 28.3700 31.6100 31.6100 32.2280 35.1200 35.280 36.6600 36.6600 36.6600 37.5100 Yes

Owen J Roberts SD 23.2700 23.9600 24.8900 25.5000 26.1700 26.820 27.2759 27.7395 28.2888 28.8262 Yes

Oxford Area SD 23.2500 25.1592 28.6865 29.5479 29.5479 29.548 30.0500 30.0502 30.2324 30.5350 Yes

Phoenixville Area SD 23.1200 24.4400 25.8900 26.3900 27.0600 27.780 28.2400 28.6400 28.8900 28.8900 Yes

Tredyffrin-Easttown SD 15.7300 16.2600 16.9700 17.4700 17.9700 18.647 19.2630 19.5902 20.2171 20.9868 No

Unionville-Chadds Ford SD 20.4900 21.5700 22.5300 23.5800 24.2600 24.530 25.1800 25.7300 26.4400 26.9900 No

West Chester Area SD 15.1600 15.7900 16.8500 17.8500 18.3600 18.360 18.6700 18.6700 19.2100 19.5779 Yes

*23.82 since 2004-05

Act 1 and Local Revenue

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*2011-12 Avon Grove millage increase exceeded the Act 1 Index.

PDE approved exceptions for PSERS & Special Education.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

0.00% 0.00%

3.80%

5.90%

2.18%

0.00%

2.80% 2.39%

5.90%

5.40%

3.80%

1.80% 2.20% 2.30%

2.80%

2.40%

Avon Grove School District Tax Increase Compared to Act 1 Index

2008 through 2016

Tax Increase

2015-2016 2016-2017

Increase

Assessed Value Mill*

Total Tax Paid

Assessed Value Mill*

Total Tax Paid

$50,000 28.157 $1,407.85 $50,000 29.05 $1,452.50 $44.65

$110,000 28.157 $3,097.27 $110,000 29.05 $3,195.50 $ 98.23

$168,025 28.157 $4,731.08 $168,025 29.05 $4,881.12 $150.04

$225,000 28.157 $6,335.32 $225,000 29.05 $6,536.25 $200.93

$300,000 28.157 $8,447.10 $300,000 29.05 $8715.00 $267.90

*2016/17 Act l Index 3.2% = .90 Maximum Millage Increase allowed

Increase not reflecting 2016 Homestead Exclusion (PA Property Tax Relief)

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Local Revenue

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Value of 1 mill

@ % of coll

Value of 1 mill @

% of coll

Value of 1 mill

@ % of coll

Value of 1 mill

@ % of coll

$1,756,730 $1,795,833 $1,834,936 $1,845,203

6111 - CURRENT REAL ESTATE

2013-2014 2014-2015 2015-16 2016-17

Avon Grove School District Actual Actual Estimate Budget

6111-Real Estate Taxes 45,069,598$ 47,096,748$ 49,072,686$ 53,603,151$

Increase/(Decrease) $589,851 $2,027,150 $1,975,938 $4,530,465

% Increase/(Decrease) 1.33% 4.50% 4.20% 9.2%

Change in Assessed Value -$

Final Assessed Values-County $1,849,189,611 $1,880,453,697 $1,891,686,467 $1,902,271,305

Mills 26.7500 27.4990 28.1570 29.0500

Tax Levy on A.V. $49,465,822 $51,710,596 $53,264,216 $55,260,981

Less Homestead Exclusion -$2,673,800 -$2,673,807 -$2,673,610 $0

Net Tax Revenue Generated by Mills $46,792,022 $49,036,789 $50,590,606 $55,260,981

Budgeted % of Collection from PDE-2028 95.00% 95.50% 97.00% 97.00%

% Face Collected 97.38% 97.63% 97.00% 97.00%

% Difference 2.38% 2.13% 0.00% 0.00%

Real Estate Taxes Coll-Budget $44,452,421 $46,830,140 $49,072,888 $53,603,152

Net Real Estate Taxes Coll-Audit 45,069,598$ $47,096,748 $49,072,686 53,603,152$

BUDGET - OVER/(NOT COLLECTED) $617,177 $266,608 ($202) $0

Local Revenue

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2013-2014 2014-2015 2015-16 2016-17

Actual Actual Estimate Budget

6113 - Public Utility Realty Tax $58,579 $60,190 $60,000 $60,000

Act 511

6153 - R/E Transfer Tax $822,118 $782,426 $700,000 $800,000

Total Act 511 $822,118 $782,426 $700,000 $800,000

% Increase/(Decrease)

6112 - Interim Taxes $564,858 $530,193 $475,000 $525,000

6400 - Delinquent Taxes (All) $1,433,246 $1,718,477 $1,400,000 $1,500,000

6510 - Earnings on Investments $59,741 $58,513 $70,000 $70,000

6700- Revenue from Student Activities $452,235 $415,880 $480,000 $480,000

6832 - IDEA Pass Thru/Other $538,639 $523,367 $522,400 $522,400

6833- Federal ARRA IDEA Pass Through $0 $95,769 $0 $0

6839 - Other Intermediate Source $0 $0 $0 $0

6910 - Rentals $46,217 $67,710 $50,000 $50,000

6941 - Tuition Payments $6,146 $16,495 $3,000 $3,000

6944 - Receipts from Other LEA's $25,789 $0 $0 $0

6991 - Refund Prior Years' Expenditures $1,049 $0 $0 $0

6992 - Indirect Costs $6,092 $16,505 $4,000

6990 - Miscellaneous Revenue $80,720 $89,774 $90,928 $86,928

Total Revenue - Local Sources $49,165,027 $51,472,047 $52,924,014 $57,704,480

Increase/(Decrease) ($10,930) $2,307,020 $1,451,967 $4,780,466

% Increase/(Decrease) 0.0% 4.7% 2.8% 9.0%

Basic Education Funding History

• 1966 - Act 580 - Set the level of state support at 50%. (PASBO)

• 1983 - Act 31 - Equalized Subsidy for Basic Education (ESBE). Removed the 50% state share and added a minimum annual increase of 2%. (PASBO)

• 1991-92 - Hold Harmless (funding level from year to year) + additional funding. (PASBO)

• 2006 – Act 114 - Costing Out Study Formula has been consistent for three years (three years

following the Costing Out Study) over the past 20.

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Basic Education Funding - Plan Moving Forward

• 2014 - Act 51 - Statute established the Basic Education Funding Commission.

– Issue their report by June 10, 2015

Other Motivators / Support

• The Campaign for Fair Education Funding

• Lawsuit filed after the election by parents, districts and others, challenging the state’s education finance system.

• Governor

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What do we know? • Still waiting on a final budget for 2015-16!

– 1970-71 state budget was not passed until March 6, 1971 after a slugfest over the first state income tax.

– In 1956, final budget was not approved until June 1 (336 days after the deadline).

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On February 9, Governor Wolf presented the 2016-17 Proposed State Budget.

Highlights & Statements from Budget Address Challenges • “Our Commonwealth is in a crisis. A crisis that threatens our

future. • Pennsylvania now faces a $2 billion budget deficit. • Since 2011, school districts have been forced to increase local

property taxes by $1.2 billion, and all because of Harrisburg’s irresponsibility.

• In the last year alone, 83 school districts increased property taxes above the index because Harrisburg didn’t produce a responsible budget and another 175 school districts are contemplating additional tax increases this year for the same reason.”

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State Budget

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Challenges Continued • “This tax shifting is not sustainable, and it will only continue to squeeze families and seniors if we do not stop passing the buck on to local communities. • If we don’t have sustainable revenue sources in our budget, the result will be billions of dollars in new property tax hikes. • Today, because of years of budgetary irresponsibility, the Commonwealth of Pennsylvania is considered to be among the least creditworthy states in America.”

•All of the above quotes taken from the Governor’s February 9th Budget address.

Politically • “We had a deal.

• They walked away from the table and went home for the holidays without holding that final vote. They still have not held that final vote. And because of that, we still don’t have a budget.

• It’s up to the people in this chamber to save our taxpayers from getting handed the bills Harrisburg wasn’t responsible enough to pay.”

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State Budget

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DEPARTMENT OF EDUCATION

SUMMARY OF STATE APPROPRIATIONS February 9, 2016

(Dollar Amounts in Thousands)

2014-15

Actual

Budget

2015-16

Available

Budget

2016-17

Governor's

Executive

Budget

Variance Between

2015-16 Available

Budget and 2016-17

Governor's

Executive Budget

%

Increase/

Decrease

GRANTS & SUBSIDIES

SUPPORT OF PUBLIC SCHOOLS

Basic Education Funding 5,730,079 6,106,969 6,306,969 200,000 3.27%

Pre-K Counts 97,284 147,284 197,284 50,000 33.95%

Head Start Supplemental Assistance 39,178 49,178 59,178 10,000 20.33%

Mobile Science and Math Education Programs 1,864 - - - 0.00%

Teacher Professional Development 6,459 7,460 7,460 - 0.00%

Adult and Family Literacy 12,075 12,075 14,675 2,600 21.53%

Career and Technical Education 62,000 70,003 85,003 15,000 21.43%

Career and Technical Education Equipment Grants 3,000 3,000 5,000 2,000 66.67%

Authority Rentals and Sinking Fund Requirements 306,198 281,850 306,198 24,348 8.64%

Pupil Transportation 546,677 549,097 562,991 13,894 2.53%

Nonpublic and Charter School Pupil Transportation 78,614 80,009 80,224 215 0.27%

Special Education 1,046,815 1,096,815 1,146,815 50,000 4.56%

Early Intervention 237,516 237,516 237,516 - 0.00%

Tuition for Orphans and Children Placed in Private Homes 48,506 48,506 48,506 - 0.00%

Payments in Lieu of Taxes 163 164 164 - 0.00%

Education of Migrant Laborers' Children 853 853 853 - 0.00%

PA Charter Schools for the Deaf and Blind 42,809 44,881 47,561 2,680 5.97%

Special Education - Approved Private Schools 95,347 101,907 107,991 6,084 5.97%

School Food Services 32,488 31,988 32,488 500 1.56%

School Employees' Social Security 515,772 437,023 536,082 99,059 22.67%

School Employees' Retirement 1,157,853 1,438,687 1,503,375 64,688 4.50% SUBTOTAL - SUPPORT OF PUBLIC SCHOOLS 10,061,550 10,745,265 11,286,333 541,068 5.04%

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What the Governor’s Budget does for the AGSD Basic Education Funding - $278,000 2016-17 Proposed increase over the 2015-16 proposed.

Special Education Funding - $138,000 2016-17 Proposed increase over the 2015-16 proposed

Revenue

● AGSD State revenue is adjusted to December Blue-Lined Version except for line items tied to salaries and debt.

State Budget

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20

2013-2014 2014-2015 2015-16 2016-17

7000 - REVENUE STATE SOURCES Actual Actual Budget First Look

7110 - Basic Instructional Subsidy

Basic Education Funding 14,390,067$ 14,381,023$ 14,390,048$ 14,515,328$

7160 - Tuition Institutionalized Sec 1305 & 1306 67,185$ 59,194$ 36,000$ 40,000$

7250 - Migratory Children -$ 2,045$ -$ -$

7271 - Special Education - Funding for School Age Pupils 2,358,539$ 2,364,560$ 2,306,654$ 2,445,256$

7310 - Transportation

Total Transportation Reimbursements 2,173,277$ 2,074,577$ $2,218,157 2,100,000$

7320 - Rental and Sinking Fund Payments

Reimb. Perm Cap State

Building 2016-2017 % Reimb. Amount AR Reimb

Series 12 $222,650 19.3500% $43,083 0.5225 $22,511

Series 12A $717,890 0.0000% $0 0.5225 $0

Series 14 $1,578,850 24.9300% $393,607 0.5225 $205,660

Series 15 $752,500 27.3100% $205,508 0.5225 $107,378

Voc Tec $0 0.0000% $0 0.5225 $0

$3,271,890 $642,198 $335,548 1,150,910$ $1,173,671 735,775$ $335,548

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2013-2014 2014-2015 2015-16 2016-17

Actual Actual Budget First Look

7330 - Health Services (Medical/Dental Services) 108,808$ 6,609$ 108,500$ 108,500$ 7360 - Safe Schools -$ 21,721$ -$ 7340 - Act 1 State Property Tax 2,673,800$ 2,673,807$ 2,673,610$ -$ 7501 - State Accountability Block Grant 280,716$ 587,819$ 587,819$ 892,923$ 7502 - Dual Enrollment -$ -$ -$ -$ 7810 - State Share - Social Security 1,207,495$ 1,059,295$ 1,190,000$ 1,190,000$ 7820 - State Share - Retirement 2,481,756$ 3,256,427$ 4,080,000$ 4,660,000$

Total Revenue from State Sources: 26,892,553$ 27,660,747$ 28,326,563$ 26,287,555$

2013-2014 2014-2015 2015-16 2016-17

8000 REVENUE FROM FEDERAL SOURCES Actual Actual Budget First Look

.

8514 -Title I Education of Disadvantage 335,256$ 343,512$ 350,825$ 350,825$

8515 -Title II-Teacher Quality/Improvement 82,695$ 74,009$ 97,727$ 97,727$

8516 -Title III -LEP/Immigrant language instruction 115,142$ 104,325$ 116,317$ 116,317$

8690 -Other Federal grants-in-aid

8704 -ARRA Sch Imp/SIG

8810 -ACCESS Medical Assistance 293,177$ 609,952$ 400,000$ 400,000$

Total Revenue from Federal Sources 826,270$ 1,131,798$ 964,869$ 964,869$

2013-2014 2014-2015 2015-16 2016-17

9000 OTHER FINANCING SOURCES Actual Actual Budget First Look

9910 GAIN ON CHANGE IN ESTIMATE $2,139,766

Total Other Financing Sources 2,139,766$ -$ -$ -$

GRAND TOTAL FROM ALL SOURCES 79,023,616$ 80,264,592$ 82,215,648$ 84,956,904$

2016-17 Budget Summary

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Revenue Sources

Local $57,704,479

State $26,287,007

Federal $964,869

Other $0

$84,956,355

Expenditure Uses

Instruction $57,330,832

Support Services $25,530,822

Community Services $1,077,980

Debt Service $3,271,890

Reserves $250,000

$87,461,524

Difference Revenue to Expense $2,505,169

Use of Committed Fund Balance (PSERS) $1,828,000

Use of Un-Assigned Fund Balance $677,169

Total $2,505,169

$0

FINANCIAL INFORMATION

Revenue & Expense Analysis

Total Revenue Sources

Adj's From

State

Budget

Adjusted

Budget

$57,704,479

$416,000 $26,703,007

$964,869

$0

$85,372,355

$0 $57,330,832

$25,530,822

$1,077,980

$3,271,890

$250,000

$87,461,524

$2,089,169

$1,828,000

$261,169

$2,089,169

$0

2016-17 Budget Summary

Fund Balance

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Actual 2013-14 Actual 2014-15 Budget 2015-16 Est. 2015-16 Budget - 2016-17

General Fund *

Beginning Balance $22,991,882 $26,437,174 $27,913,688 $27,913,688 $24,854,628

Surplus/Deficit $6,529,164 $1,476,514 ($3,025,121) ($1,859,060) ($2,505,168)

Transfers

Capital Projects ($1,563,872) $0 ($1,800,000) ($1,200,000) ($1,920,250)

Internal Service Fund ($1,520,000)

Total GF Fund Balance $26,437,174 $27,913,688 $23,088,567 $24,854,628 $20,429,210

Capital Projects

Beginning Balance $1,753,349 $2,357,492 $1,841,994 $1,841,994 $1,500,000

Spending ($959,729) ($764,604) ($3,320,439) ($1,541,994) ($2,920,250)

Gain on Bond Refinancing $249,106

Transfers From General Fund $1,563,872 $0 $1,800,000 $1,200,000 $1,920,250

Total CP Fund Balance $2,357,492 $1,841,994 $321,555 $1,500,000 $500,000

Total Fund Balance Available $28,794,666 $29,755,682 $23,410,122 $26,354,628 $20,929,210

Allocation of Fund Balance

Restricted (Capital Proj) $2,357,492 $1,841,994 $321,555 $1,500,000 $500,000

Nonspendable $409,509 $0 $0 $0 $0

Committed (PSERS) $10,000,000 $10,000,000 $8,488,754 $8,488,754 $6,660,754

Assigned $588,989 $9,088,991 $7,288,991 $7,288,991 $5,368,741

Unassigned $15,438,676 $8,824,697 $7,210,822 $8,976,883 $8,149,715

Budgetary Reserve $0 $0 $100,000 $100,000 $250,000

Total Fund Balance $28,794,666 $29,755,682 $23,410,122 $26,354,628 $20,929,210

Combined General & Capital Projects Funds

Avon Grove School District

Fund Balance

* Audited

February 9, 2016 Finance Committee – 2016-17 Budget - Revenue -

February 23, 2016 Finance Committee – 2016-17 Budget

Revenue

March 8, 2016 Finance Committee – 2016-17 Budget –

Expense

April 12, 2016 Finance Committee – Budget Update

April 28, 2016 Proposed Final Budget Adoption

June 9, 2016 Final Adoption

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Avon Grove School District will continue to monitor the state budget process.

● Pennsylvania School Business Officials (PASBO) – State Budget Blog - ongoing

● Pennsylvania School Boards Association (PSBA) – State Budget

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